What Is The Law Of Diminishing Marginal Product?
Law of diminishing marginal product or productivity is an economic theory. It proclaims that while increasing one input and maintaining other inputs constant initially helps in increasing the output, a further increase in the input will have a restricted effect and will ultimately have nil consequence or a pessimistic effect on the output.
The Law of Diminishing Marginal Productivity helps in understanding why increased manufacturing isn’t always the best way to increase profitability.
What Is The Law Of Variable Proportions?
Law of variable proportions is based on the theory that when the quantity of a variable factor is increased or decreased while keeping other factors constant, there will be a change in the proportion between the two factors. It is referred to as, in the theory of production as the Law of Variable Proportions.
It is also known as the Law of Proportionality. It is mainly concerned with the changes in output that are observed when there is an increase or decrease in the units of a variable factor.
This article contains comprehensive information about the concept The Law of Diminishing Marginal Product and the Law of Variable Proportions. To learn more, stay tuned to BYJU’S.